-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PqNlg2veAKL54IrwVuLJVW1JRG7crWaQrahNRBcnMi+yGOyGN6PUIxgf1L3mWimL 0YwbTR/9fsl1iGo7LGOIiw== 0000912057-01-004945.txt : 20010214 0000912057-01-004945.hdr.sgml : 20010214 ACCESSION NUMBER: 0000912057-01-004945 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001230 FILED AS OF DATE: 20010213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON ACOUSTICS INC CENTRAL INDEX KEY: 0000805268 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651] IRS NUMBER: 042662473 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15193 FILM NUMBER: 1537021 BUSINESS ADDRESS: STREET 1: 300 JUBILEE DRIVE STREET 2: P O BOX 6015 CITY: PEABODY STATE: MA ZIP: 01961-6015 BUSINESS PHONE: 5085385000 MAIL ADDRESS: STREET 1: 300 JUBILEE DRIVE STREET 2: P O BOX 6015 CITY: PEABODY STATE: MA ZIP: 01961-6015 10-Q 1 a2038182z10-q.txt FORM 10Q - -------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________ Commission File No. 33-9875 ----------------- BOSTON ACOUSTICS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2662473 (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION OR IDENTIFICATION NO.) ORGANIZATION) 300 JUBILEE DRIVE PEABODY, MASSACHUSETTS 01960 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (978) 538-5000 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] There were 5,102,914 shares of Common Stock issued and 4,930,414 shares outstanding as of February 9, 2001. - -------------------------------------------------------------------------- Boston Acoustics, Inc. INDEX PAGE ---- Part I: Financial Information Item 1. Financial Statements (Unaudited) Consolidated Balance Sheets March 25, 2000 and December 30, 2000 4 Consolidated Statements of Income Three months and Nine Months ended December 25, 1999 and December 30, 2000 6 Consolidated Statements of Cash Flows Nine Months ended December 25, 1999 and December 30, 2000 7 Notes to Unaudited Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II: Other Information Items 1 through 6 14 Signatures 15 2 PART I: FINANCIAL INFORMATION Item 1: Financial Statements 3 Boston Acoustics, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) ASSETS
MARCH 25, 2000 DECEMBER 30, 2000 -------------- ----------------- Current Assets: Cash and cash equivalents $ 1,506,741 $ 1,925,532 Accounts receivable, net of reserves of approximately $345,000 and $471,000, respectively 12,632,632 17,020,667 Inventories 19,333,515 31,100,166 Deferred income taxes 1,545,000 1,545,000 Prepaid expenses and other current assets 1,151,536 891,024 ----------- ----------- Total current assets 36,169,424 52,482,389 ----------- ----------- Property and Equipment, at cost: Land 1,815,755 1,815,755 Building and improvements 7,925,701 8,821,176 Machinery and equipment 13,517,432 14,712,852 Office equipment and furniture 4,131,718 4,660,474 Motor vehicles 259,319 271,197 ----------- ----------- 27,649,925 30,281,454 Less-accumulated depreciation and amortization 12,035,891 14,570,992 ----------- ----------- 15,614,034 15,710,462 ----------- ----------- Other Assets 1,080,569 1,206,820 ----------- ----------- $52,864,027 $69,399,671 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 4 Boston Acoustics, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY
MARCH 25, 2000 DECEMBER 30, 2000 -------------- ----------------- Current Liabilities: Accounts payable $ 6,002,158 $11,599,383 Accrued payroll and payroll- related expenses 2,148,272 1,916,704 Dividends payable 417,201 418,701 Other accrued expenses 1,171,200 1,429,469 Current maturity of line of credit 1,602,287 1,509,634 ----------- ----------- Total current liabilities 11,341,118 16,873,891 ----------- ----------- Line of credit, net of current portion 4,850,000 11,600,000 ----------- ----------- Commitments Shareholders' Equity: Common stock, $.01 par value Authorized -- 8,000,000 shares Issued -- 5,080,764 and 5,102,914 shares at March 25, 2000 and December 30, 2000, respectively 50,807 51,029 Additional paid-in capital 918,534 1,206,262 Retained earnings 38,131,912 42,096,833 ----------- ----------- 39,101,253 43,354,124 Less--Treasury stock, 172,500 shares, at cost 2,428,344 2,428,344 ----------- ----------- Total shareholders' equity 36,672,909 40,925,780 ----------- ----------- $52,864,027 $69,399,671 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 5 Boston Acoustics, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ------------------ December 25, December 30, December 25, December 30, 1999 2000 1999 2000 (13 WEEKS) (13 WEEKS) (39 WEEKS) (40 WEEKS) ------------ ------------ ------------ ------------ Net sales $30,567,062 $33,682,164 $81,091,896 $91,089,338 Cost of goods sold 20,158,335 24,152,821 55,005,437 64,584,992 ----------- ----------- ----------- ----------- Gross profit 10,408,727 9,529,343 26,086,459 26,504,346 ----------- ----------- ----------- ----------- Selling and marketing expenses 3,003,881 3,663,246 8,219,810 9,732,302 General and administrative expenses 1,207,442 1,522,588 3,603,966 4,015,436 Engineering and development expenses 1,478,941 1,233,136 4,643,589 4,013,480 ----------- ----------- ----------- ----------- Total operating expenses 5,690,264 6,418,970 16,467,365 17,761,218 ----------- ----------- ----------- ----------- Income from operations 4,718,463 3,110,373 9,619,094 8,743,128 Interest income 18,821 26,649 65,467 66,269 Interest expense (173,353) (207,374) (546,599) (459,373) ----------- ----------- ----------- ----------- Income before provision for income taxes 4,563,931 2,929,648 9,137,962 8,350,024 Provision for income taxes 1,764,000 1,099,000 3,526,000 3,132,000 ----------- ----------- ----------- ----------- Net income $ 2,799,931 $ 1,830,648 $ 5,611,962 $ 5,218,024 =========== =========== =========== =========== Net income per share Basic $ .55 $ .37 $ 1.11 $ 1.06 =========== =========== =========== =========== Diluted $ .51 $ .36 $ 1.05 $ 1.05 =========== =========== =========== =========== Weighted average common shares outstanding Basic 5,048,868 4,918,471 5,042,091 4,911,568 Diluted 5,448,015 5,017,045 5,339,945 4,950,456 Dividends per share $ .085 $ .085 $ .255 $ .255 =========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 6 Boston Acoustics, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
NINE MONTHS ENDED ----------------- DECEMBER 25, 1999 DECEMBER 30, 2000 ----------------- ----------------- Cash flows from operating activities: Net income $ 5,611,962 $ 5,218,024 Adjustments to reconcile net income to net cash provided by (used in) operating activities- Depreciation and amortization 2,192,365 2,538,116 Changes in assets and liabilities, net of acquisition -- Accounts receivable (4,630,960) (4,388,035) Inventories 2,716,184 (11,766,651) Prepaid expenses and other current assets (604,002) 260,512 Accounts payable 4,723,336 5,597,225 Accrued payroll and other accrued expenses 888,448 26,701 Accrued income taxes (357,571) --- ------------- ------------ Net cash provided by (used in) operating activities 10,539,762 (2,514,108) ------------- ------------ Cash flows from investing activities: Purchases of property and equipment, net (2,745,903) (2,631,529) Increase in other assets (239,824) (129,266) ------------- ------------ Net cash used in investing activities (2,985,727) (2,760,795) ------------- ------------ Cash flows from financing activities: Dividends paid (1,284,546) (1,251,603) Purchase of treasury stock (1,277,719) --- Proceeds from line of credit --- 8,500,000 Repayments of line of credit (5,438,795) (1,842,653) Proceeds from exercise of stock options 146,167 287,950 ------------- ------------ Net cash provided by (used in) financing activities (7,854,893) 5,693,694 ------------- ------------ Increase (Decrease) in cash and cash equivalents (300,858) 418,791 Cash and cash equivalents, beginning of period 2,096,246 1,506,741 ------------- ------------ Cash and cash equivalents, end of period $ 1,795,388 $ 1,925,532 ------------- ------------ Supplemental Disclosure of NonCash Financing Activities: Dividends payable $ 424,342 $ 418,701 ------------- ------------ Supplemental Disclosure of Cash Flow Information: Cash paid for income taxes $ 4,259,871 $ 2,684,500 ------------- ------------ Cash paid for interest $ 531,446 $ 447,321 ============= ============
The accompanying notes are an integral part of these consolidated financial statements. 7 Boston Acoustics, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (1) Basis of Presentation The unaudited consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and include, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of interim period results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes, however, that its disclosures are adequate to make the information presented not misleading. The results for the three and nine-month periods ended December 30, 2000 are not necessarily indicative of results to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company's Annual Report included in its Form 10-K for fiscal year ended March 25, 2000. (2) Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:
MARCH 25, 2000 DECEMBER 30, 2000 -------------- ----------------- Raw materials and work-in-process $10,547,363 $11,384,627 Finished goods 8,786,152 19,715,539 ----------- ----------- $19,333,515 $31,100,166 =========== ===========
Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. (3) Net Income Per Common Share Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution from common stock equivalents (stock options). For the three-month period ended December 30, 2000, there were 81,334 stock options, and for the nine-month period there were 219,897 stock options that have been excluded from the weighted average number of common and dilutive shares outstanding as their effect would be anti-dilutive. For the three-month period ended December 25, 1999, there were 361,917 stock options, and for the nine-month period there were 212,768 stock options that have been excluded from the weighted average number of common and dilutive shares outstanding as their effect would be anti-dilutive. 8 A reconciliation of the number of shares used in the calculation of basic and diluted net income per share, is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ----------------- December 25, December 30, December 25, December 30, 1999 2000 1999 2000 ------------ ------------ ------------ ------------ Weighted average common shares outstanding 5,048,868 4,918,471 5,042,091 4,911,568 Dilutive effect of assumed exercise of stock options and warrant 399,147 98,574 297,854 38,888 ----------- ----------- ----------- ----------- Weighted average common shares outstanding assuming dilution 5,448,015 5,017,045 5,339,945 4,950,456 =========== =========== =========== ===========
(4) Segment Reporting The Company has two reportable segments: 1) Core, and 2) Original Equipment Manufacturer (OEM) and Multimedia. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company does not allocate operating expenses between its two reportable segments. Accordingly, the Company's measure of profit for each reportable segment is based on gross profit.
THREE MONTHS ENDED DECEMBER 30, 2000 - ------------------------------------ OEM and FISCAL 2001 CORE MULTIMEDIA TOTAL ----------- ---- ---------- ----- Net Sales $16,649,964 $17,032,200 $33,682,164 =========== =========== =========== Gross profit $ 5,462,352 $ 4,066,991 $ 9,529,343 =========== =========== ===========
THREE MONTHS ENDED DECEMBER 25, 1999 - ------------------------------------ OEM and FISCAL 2000 CORE MULTIMEDIA TOTAL ----------- ---- ---------- ----- Net Sales $17,868,003 $12,699,059 $30,567,062 =========== =========== =========== Gross profit $ 7,606,264 $ 2,802,463 $10,408,727 =========== =========== ===========
9
NINE MONTHS ENDED DECEMBER 30, 2000 - ----------------------------------- OEM and FISCAL 2001 CORE MULTIMEDIA TOTAL ----------- ---- ---------- ----- Net Sales $45,607,684 $45,481,654 $91,089,338 =========== =========== =========== Gross profit $15,779,446 $10,724,900 $26,504,346 =========== =========== ===========
NINE MONTHS ENDED DECEMBER 25, 1999 - ----------------------------------- OEM and FISCAL 2000 CORE MULTIMEDIA TOTAL ----------- ---- ---------- ----- Net Sales $44,434,630 $36,657,266 $81,091,896 =========== =========== =========== Gross profit $17,705,657 $ 8,380,802 $26,086,459 =========== =========== ===========
(5) Significant Customers For the three-month periods ended December 30, 2000 and December 25, 1999, two customers represented approximately 60% and 52% of the Company's net sales, respectively. The same two customers accounted for approximately 57% and 54% of the net sales for the nine months ended December 30, 2000 and December 25, 1999 respectively. (6) International Operations The Company maintains sales concentrations in Europe, Asia, and Canada in addition to distributing product through two foreign subsidiaries. Export sales accounted for approximately 20% and 16% of sales for the three-month periods ended December 30, 2000 and December 25, 1999, respectively. For the nine-month periods ended December 30, 2000 and December 25, 1999, export sales accounted for 17% and 16%, respectively. (7) Recent Accounting Pronouncements In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 establishes accounting and reporting disclosure standards for derivative instruments including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities. SFAS No. 133, as amended by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133, is effective for all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company does not expect adoption of this statement to have a material impact on its consolidated financial position or results of operations. The Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition, in December 1999. The adoption of SAB No. 101 did not have a material impact on the Company's operating results. In March 2000, the FASB issued Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation -- an Interpretation of APB Opinion No. 25 in certain situations, as defined. The Interpretation is effective July 1, 2000, but covers certain events during the period after December 15, 1998 but before the effective date. The adoption of this interpretation did not have any effect on the accompanying financial statements. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth the results of operations for the three-month and nine-month periods ended December 25, 1999 and December 30, 2000 expressed as percentages of net sales.
THREE MONTHS ENDED NINE MONTHS ENDED ------------------ ----------------- December 25, December 30, December 25, December 30, 1999 2000 1999 2000 (13 WEEKS) (13 WEEKS) (39 WEEKS) (40 WEEKS) ------------ ------------ ------------ ------------ Net sales 100.0% 100.0% 100.0% 100.0% Cost of goods sold 65.9 71.7 67.8 70.9 ------ ------ ------ ------ Gross profit 34.1 28.3 32.2 29.1 ------ ------ ------ ------ Selling and marketing Expenses 9.8 10.9 10.1 10.7 General & administrative Expense 4.0 4.5 4.5 4.4 Engineering & development Expenses 4.8 3.7 5.7 4.4 ------ ------ ------ ------ 18.6 19.1 20.3 19.5 ------ ------ ------ ------ Income from operations 15.5 9.2 11.9 9.6 Interest income (expense), net (0.6) (0.5) (0.6) (0.4) ------ ------ ------ ------ Income before provision for income taxes 14.9 8.7 11.3 9.2 Provision for income taxes 5.8 3.3 4.4 3.5 ------ ------ ------ ------ Net income 9.1% 5.4% 6.9% 5.7% ====== ====== ====== ======
Net sales for the third quarter increased 10%, from approximately $30,567,000 last year to approximately $33,682,000 for the current fiscal period. For the nine-month period ended December 30, 2000, net sales increased 12% from approximately $81,092,000 during Fiscal 2000 to approximately $91,089,000. The nine-month period ended December 30, 2000 includes 40 weeks of sales and earnings compared to 39 weeks for the corresponding nine-month period last fiscal year. The sales increase for the three-month period ended December 30, 2000 was the result of increased sales in the OEM and Multimedia segment which offset a decrease in the Core business segment compared to the same period a year ago. The Core business was impacted during December 2000 from the slowdown in U.S. retail sales, and while the OEM/Multimedia sales increased, the increase was below original expectations. The increased sales of the 11 OEM and Multimedia segment resulted primarily from sales of the BA265 two-piece speaker system introduced in June of the first quarter of Fiscal 2001 and available only through our OEM customer, Gateway, Inc. ("Gateway"). The Core business included the replacement of the CX line of car speakers with the introduction of the FX Series. The new FX Series includes nine models ranging from $69.95 per pair to $139.95 per pair MSRP. The Company's gross margin for the three-month and nine-month periods ended December 30, 2000 decreased as a percentage of net sales as compared to corresponding periods in the prior fiscal year due primarily to increased production expenses including those associated with the Company's efforts to complete the fulfillment of back orders experienced during the first quarter of Fiscal 2001. These expenses included the hiring of temporary contract labor, as well as increased overtime expenses. In addition, the Company experienced higher scrap, freight, rework and warehousing costs as compared to the same periods a year ago. The Company has now implemented changes to improve production efficiency by eliminating temporary contract labor, reducing our work force and minimizing overtime expenses. Gross margins were also negatively impacted by the sales mix as the OEM/Multimedia segment of sales, which have lower gross margins, represented a larger portion of total net sales in Fiscal 2001 as compared to Fiscal 2000. Total operating expenses increased in absolute dollars during both the three-month and nine-month periods ended December 30, 2000. Selling and marketing expenses have increased in absolute dollars primarily due to increased salaries and benefits relating to additional personnel and increased advertising costs relating to both the Core and Multimedia retail segments. The increase in absolute dollars of general and administrative expenses for both the three-month and nine-month period ended December 30, 2000 can be attributed to increased payroll related costs and additional insurance costs. Engineering and development expenses for the three-month and nine-month periods ended December 30, 2000 have decreased in both absolute dollars and as a percentage of net sales due primarily to lower payroll-related costs, consulting fees and reduced expenses relating to outside services as compared to the same periods a year ago. Net interest expense has increased in absolute dollars during the three-month period ended December 30, 2000 compared to the corresponding period a year ago due to an increase in the Company's line of credit borrowings resulting from the increased inventory levels during the quarter. During the nine-month comparative period net interest expense has remained relatively stable as a percentage of net sales. The Company's effective income tax rate decreased to 37.5% for the three-month and nine-month periods ended December 30, 2000 compared to 38.6% for the same periods a year ago due to lower state income taxes, and a larger percentage of international sales. Net income for the third quarter decreased from approximately $2,800,000 in Fiscal 2000 to approximately $1,831,000 in Fiscal 2001 while diluted earnings per share decreased from $.51 to $.36 per share. Net income for the nine-month period ended December 30, 2000 decreased from approximately $5,612,000 in Fiscal 2000 to approximately $5,218,000 in Fiscal 2001, while diluted earnings per share for both nine-month periods remained unchanged at $1.05 per share. The decrease in net income for the three and nine-month periods ended December 30, 2000 is primarily the result of the increase in production related expenses during the three-month period ended December 30, 2000 resulting in an increase in cost of goods sold. Liquidity and Capital Resources During the first nine months of Fiscal 2001, the Company financed its growth principally with net proceeds of approximately $6,657,000 from the Company's revolving line of credit. As of December 30, 2000 the Company's working capital was approximately $35,608,000, an increase of approximately $10,780,000 since the end of Fiscal 2000. The increase in working capital was primarily due to increases in inventory and accounts receivable that were partially offset by increased accounts payable balances. The Company's cash and cash equivalents were approximately $1,926,000 at December 30, 2000, an increase of approximately $419,000 from March 25, 2000 primarily due to increased borrowings from the line of credit. The Company's increased inventory levels were the consequences of disappointing sales in both the Core and OEM segments of the business: $2.2 million of additional Core finished goods and $8.9 million 12 of additional Multimedia products. The Company's increased accounts receivable balance is mainly the result of the timing of payments by certain larger customers, which were subsequently received after December 30, 2000. Current liabilities increased by approximately $5,500,000 primarily as a result of increased accounts payable related to inventory purchases and other accrued expenses. Long term debt increased by $6,750,000 as a result of borrowings under the Company's line of credit. The Company has two lines of credit with two banking institutions totaling $26,500,000. The increase in borrowings is primarily the result of a temporary increase in accounts receivable and inventory as of December 30, 2000. The Company believes that its current resources are adequate to meet its requirements for working capital and capital expenditures for the foreseeable future. Significant Customers The Company's financial results for the three-month and nine-month periods ended December 30, 2000 include significant OEM sales of multimedia speaker systems to Gateway. The terms of these sales are governed by a Master Supply Agreement between Gateway and the Company dated July 19, 1999, which defines such issues as ordering and invoicing procedures, shipping charges, warranties, repair service support, product safety requirements, etc. This Master Supply Agreement with Gateway does not contain minimum or scheduled purchase requirements; therefore, purchase orders by Gateway may fluctuate significantly from quarter to quarter. Based on information currently available from our OEM customer, the Company anticipates that our OEM sales will be flat for the quarter ending March 31, 2001 as compared to the quarter ended March 25, 2000. The loss of Gateway as a customer or any significant portion of orders from Gateway could have a material adverse affect on the Company's business, results of operations and financial condition. In addition, the Company also could be materially adversely affected by any substantial work stoppage or interruption of production at Gateway or if Gateway were to reduce or cease conducting operations. Cautionary Statements The Private Securities Litigation Reform Act of 1995 contains certain safe harbors regarding forward-looking statements. From time to time, information provided by the Company or statements made by its directors, officers, or employees may contain "forward-looking" information which involve risk and uncertainties. Any statements in this report that are not statements of historical fact are forward-looking statements (including, but not limited to, statements concerning the characteristics and growth of the Company's market and customers, the Company's objectives and plans for future operations, and the Company's expected liquidity and capital resources. Such forward-looking statements are based on a number of assumptions and involve a number of risks and uncertainties, and accordingly, actual results could differ materially. Factors that may cause such differences include, but are not limited to: the continued and future acceptance of the Company's products, the rate of growth in the audio industry; the presence of competitors with greater technical marketing and financial resources; the Company's ability to promptly and effectively respond to technological change to meet evolving consumer demands; capacity and supply constraints or difficulties; and the Company's ability to successfully integrate new operations. The words "believe," "expect," "anticipate," "intend" and "plan" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. For a further discussion of these and other significant factors to consider in connection with forward-looking statements concerning the Company, reference is made to Exhibit 99 of the Company's Form 8-K filed on July 18, 1996. 13 PART II: OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION None Item 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed during the quarter ended December 30, 2000. 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BOSTON ACOUSTICS, INC. Registrant Date: February 9, 2001 By: /S/ANDREW G. KOTSATOS ----------------------- Andrew G. Kotsatos Director, Chief Executive Officer and Treasurer Date: February 9, 2001 By: /S/MOSES A. GABBAY ----------------------- Moses A. Gabbay Director, President and Chief Operating Officer Date: February 9, 2001 By: /S/DEBRA A. RICKER-ROSATO -------------------------- Debra A. Ricker-Rosato Vice President and Chief Accounting Officer 15 -----END PRIVACY-ENHANCED MESSAGE-----